Fitch: Chinese auto industry stable

Fitch Ratings said the outlook for the Chinese auto sector will remain stable throughout 2008, based on the growth potential and fundamentals of the major Chinese auto companies.

The sector's performance also will continue to benefit from the unabated robust demand and increasing capacity utilization rate, Fitch said, despite a potential ease in the growth rate expected.

The agency said local carmakers will face stiffer competition with foreign brands in 2008 as the medium-sized car segment becomes a major competition ground.

The agency said it expects Denway Motors Ltd. (rated BBB- with stable view), Chongqing Changan Automobile Co., Ltd. (rated BB with stable view) and Dongfeng Motor Group Co. Ltd. (BBB with stable view) also will maintain stable outlooks in 2008, underpinned by the expected ongoing strong performance of their joint ventures with foreign partners in China.

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